Interest rates for everything from a home mortgage to the array of commercial property loans have remained very low through and coming out of the pandemic.
Most lenders and analysts surveyed in late summer by Bankrate said there continue to be opportunities for home and property owners to save money through restructuring a loan under current rates.
In the survey, 22% of Bankrate’s respondents said rates would go down, and 67% anticipated rates staying steady. And through the spring and summer with mortgages rates hovering around 3% and commercial loans roughly in a range of 3-7% depending on loan type, lenders report that about two-thirds of August business was in refinance, according to the Mortgage Bankers Association.
“It’s important to pause for a moment and recognize that monetary policy, with short-term interest rates set near zero, has effectively become looser as inflation has moved upward. In the past year, the consumer price index is up 5.3%, which means that a short-term interest rate target of 0.1% generates a ‘real’ (inflation-adjusted) interest rate of -5.2%. By contrast, the lowest real short-term interest rate in 2020 was -1.4% in March 2020… the lowest real rate in the aftermath of the Financial Crisis was -3.8%.”
— First Trust Advisors Chief Economist BrianWesbury
Commercial property owners who refinance often are motivated to take advantage of lower interest rates for a down payment on a new property, to reinvest and improve a property, or to have more cash in the bank.
Commercial Loan Types and Early September Rates
Bridge Rates : 4.12% – 13.12%
CMBS Rates : 3.04% – 4.60%
Construction Rates : 4.75% – 9.75%
Conventional Loan Rates: 2.12% – 6.29%
Insurance Rates : 2.78% – 5.58%
Mezzanine Rates : 4.54% – 9.10%
Private Banking Rates: 2.12% – 4.54%
SBA 7a Rates : 2.25% – 5.75%
SBA 504 Rates : 2.59% – 2.85%
USDA Rates : 3.25% – 6.25%
Economists point to the continued concern with the coronavirus, particularly the Delta variant, and its effect on the labor market. August numbers came back weaker than anticipated, suppressing any expectation the Fed may make a move to increase rates.
As the economy improves, and particularly if inflation takes hold, the Fed will begin to raise rates.
“We have said that we would continue our asset purchases at the current pace until we see substantial further progress toward our maximum employment and price stability goals, measured since last December, when we first articulated this guidance,” Chair of the Federal Reserve of the United States Jerome Powell said in August. “My view is that the “substantial further progress” test has been met for inflation. There has also been clear progress toward maximum employment.”
Average U.S. home values have increased nearly 70% since 2011. While some segments of the economy struggled during the COVID-19 pandemic, increased demand continued to drive home prices up. Unfortunately, these trends put homeownership further out of reach for low- and moderate-income homebuyers who rely on affordable housing options to build equity and wealth.
It’s Fannie Mae’s mission to provide affordable housing opportunities across the country, and we recognize the critical role manufactured housing plays in fulfilling that mission. The high-quality, affordable housing segment is needed now more than ever before as rising prices put site-built homes out of reach for more and more borrowers.
Manufactured Homes Have Come A Long Way
In the decade between 2010 and 2020, shipments of manufactured homes have almost doubled in the United States. Despite that fact, manufactured homes represent only 6.3% of the nation’s housing stock, and 10.4% of new houses sold.
These numbers, while modest today, represent a great opportunity for growth. With aesthetic features like higher-pitched rooflines and low-profile foundations, durable siding materials, and high-end interior finishes, we can see great potential for incremental sales of today’s modern manufactured homes, which is why we launched MH Advantage® financing in 2018 to support this new and growing market.
MH Advantage financing is different from traditional manufactured home mortgages in several critical ways. Homebuyers purchasing eligible homes may qualify for home loans with as little as 3% down and lower interest rates than other manufactured home loan options. What’s more, if there aren’t other MH Advantage homes available as comparables, appraisers use the best available comparable home, which may include site-built homes.
With similar features and similar financing to site-built homes, MH Advantage-eligible homes are positioned to appeal to homebuyers who might not have considered manufactured homes before, growing market share and increasing sales of this home type. And new sales channels can help replicate the site-built buying experience as well.
MH Advantage-eligible Homes in Subdivisions
Picture a homebuyer driving down the road. She sees a sign advertising new homes and decides to go check it out. The homebuyer meets with a sales rep, who takes her on a tour of a model home, maybe several, and talks through all the customization options she can choose from.
This could describe someone visiting a manufactured home retailer, or it could describe someone visiting the sales office of a homebuilder starting a new community. The consumer experience in these two situations has a lot in common. And the end result, a brand new, high-quality, customized home permanently affixed to a plot of land, is the same as well.
But there are a number of big differences to consider. For example, a site-built home in a subdivision will often be more expensive and take longer to build than a manufactured home. It’ll be subject to weather delays and involve significantly more waste. And with material and labor costs skyrocketing, every bit of efficiency can make real impacts on the bottom line.
With MH Advantage-eligible homes maintaining aesthetic and durability features of site-built homes, they are an ideal fit for builders and developers to consider in their next subdivision model when looking to offer a more affordable product to customers without sacrificing the quality their customers expect. Industry stakeholders are already seeing some positive results as they begin to realize the value of including MH Advantage-eligible homes in subdivisions.
An MH Advantage-eligible home. Photo courtesy of Fannie Mae.
Seeing Early Successes : High-Quality Housing to Meet Growing Demand
Strong economic activity in the surrounding regions has sparked an interest in Oroville, California, as an appealing, affordable destination for homeowners in recent years. While the Butte County city experienced a 10.7% population growth between 2010 and 2019, it reported a growth of 20% between August 2019 and August 2020. This city has a substantial need to quickly ramp up its affordable housing supply.
A partnership between Skyline Champion Corporation and west-coast builder W&R will deliver 134 MH Advantage-eligible homes, with the first model units being installed in a new subdivision in 2021. These newly built MH Advantage-eligible homes are estimated to cost nearly $100,000 less than comparable existing site-built properties in the Oroville area, lending credence to the idea that newly constructed manufactured homes are cost-effective, without compromising on quality or aesthetics.
Traditional Retailer Changes Business Model to Capture New Market
In the Cordell Oaks subdivision, located in Guadalupe County, Texas, the population continues to grow, and home prices continue to increase. The metro area population of nearby San Antonio saw a 2.07% increase between 2020 and 2021, while the average sales prices for new and existing homes increased 5% during the 12 months ending July 2020.
One of the home builders who developed this community chose MH Advantage-eligible homes to offer affordable housing with prices substantially below comparable homes in the area. The resulting Cordell Oaks subdivision features 21 one-acre lots, and it serves as the first full MH Advantage-eligible community in Texas. The home prices start at $201,995, while similar site-built homes on an acre of land are at a $300K price point in that area.
The project is a result of the work of Spark Homes and Champion Home Builders.
Manufactured Homes are the Affordable Homes of the Future
Manufactured homes already provide an affordable source of housing to 22 million Americans. Still, as home prices increase and borrowers continue to be priced out of the site-built market, there remains a gap that manufactured housing is poised to fill. Particularly with MH Advantage-eligible homes, getting these high-quality products in front of consumers is the first critical step to breaking down mental barriers that stand between a buyer looking for a site-built home and considering a manufactured home.
MH Advantage-eligible subdivisions give consumers that opportunity to see manufactured homes with all of the must-have features and finishes in an affordable package in the same environment they’re used to seeing site-built homes. These subdivisions will help site-built homebuyers see that a manufactured home is a solution that puts the house that they want within their reach.
Michael Dixon is on Fannie Mae’s Environmental, Social and Governance team as part of Impact and Engagement. He manages the manufactured housing initiatives to support Fannie Mae’s Duty to Serve Plan.
The SECO National Conference of Community Owners Holds Virtual Meeting For Manufactured Housing Professionals
SECO21 is underway with hundreds of manufactured housing professionals attending and involved in a variety of educational and networking opportunities, including solo presentations, expert panels, mini-TED talks, fireside chats, and a cocktail hour.
During a session called Ready, Set, Grow: Developing and Expanding with Manufactured Housing, Scott Roberts, of Roberts Communities, led the audience through a session on the potential opportunity and common pitfalls in breaking new ground.
“We need more and more people to take the risk and develop new communities,” said Roberts, who has a large presence in Texas and the west.
But, Roberts warned, the development business is not for the faint of heart.
“It seems every time I’ve purchased a property I’ve been in a flood zone,” he said. “It gets very expensive.”
Roberts said developers of a new ground-up manufactured home community can expect to invest about 25% more than the original plan indicates, and that it can take as many as five years to begin making money on the property.
“Flatter is better. Don’t try to work against mother nature. And you have to be on a flat surface to make manufactured homes work they way they should,” he said.
Roberts said he prefers to develop in major metro areas with a population of 300,000 or greater, and preferably in a place with good job growth.
“I look for cities with expensive apartments,” Roberts said. “Your real competition at that point is the $200,000 home buyer.”
Roberts, a second-generation owner, said he’s built his track record with attractive, affordable communities and a winning presentation ready when he goes to talk with planning and zoning officials.
“We have no issued getting zoning,” Roberts said. “If more people do high-quality projects… the more communities you’ll get to create.”
Don Westphal, of Nadi Group, has consulted with Robert Communities on planning and design, and affirmed the approach toward answering all local questions and concerns on a new project from the outset.
“Don’t be caught flat-footed,” Westphal said. “Have answer to all of the questions… everyone is going to want to pick apart your plan.
“Presentation is what it’s all about,” he continued. “Exhibit in your presentation what the impact on the environment will be, and what steps you’re taking.”
Westphal emphasized building a team, explaining everyone’s qualifications, and preparing to talk with neighbors about specifics.
“Where will the entrance for the community be? It seems like a small thing, but it’s not. Is there a home across the street that can expect headlight through the wide each day as residents are coming or going?”
Datacomp has made available its September 2021 JLT Reports for mobile home rent comps, occupancy, and other vital data from manufactured home communities in Oklahoma, California, and Texas.
JLT Market Reports provide detailed research and information on communities in 186 housing markets throughout the United States. These include the latest rent trends and statistics, marketing programs, and a variety of other useful management insights.
Datacomp maintains and provides the JLT Market Reports and is the nation’s #1 provider of market data for the manufactured housing industry. JLT Market Reports are recognized as the industry standard for manufactured home community market analysis.
September 2021 manufactured housing market data published in JLT Market Reports for the three states include information from 28 markets on 1,027 “All ages” and “55+” manufactured home communities.
Altogether, the reports from California, Texas, and Oklahoma manufactured home communities include data representations for 217,788 homesites.
Regional Trends in Manufactured Housing Community Rent
Pacific region manufactured home communities show a year-over-year 2.8% increase in lot rent and a 0.4% occupancy increase across 974 communities.
Southwest region manufactured home communities show a year-over-year 4.6% increase in lot rent for and a 0.7% occupancy increase across 510 communities.
“Rent and occupancy rates increased modestly through most markets in the three states’ JLT Market Reports updated and published in September 2021,” Datacomp Co-President and Chief Business Development Officer Darren Krolewski said. “Only one California market among retirement communities showed an above-average rent increase.”
What’s in JLT Market Reports?
Each JLT manufactured home community rent and occupancy report from Datacomp has detailed information about investment grade communities in the major markets. The detailed information includes:
Number of homesites
Occupancy rates
Average community rents, and increases
California rent control and next increase data
Community amenities
Vacant lots
Repossessed and inventory homes, and much more
JLT Market Reports also include management insights that rank communities by the number of homesites, occupancy rates, and highest to lowest rents. Established reports show trends in each market with a comparison of September 2021 rents and occupancy rates to September 2020, as well as a historical recap of rents and occupancy from 1996 to the present date in most markets.
The September 2021 JLT Market Reports for Texas, California, and Oklahoma manufactured home communities are available for purchase and immediate download online at the Datacomp JLT Market Report website, or they may be ordered by phone in electronic or printed editions at (800) 588-5426.
Each fully updated report for mobile home communities is a comprehensive look at investment grade properties within a market, enabling owners and managers, lenders, appraisers, brokers, and other organizations to effectively benchmark those communities and make informed business decisions.
Augusta Communities is Unique Among Industry Nonprofits
Manufactured home communities have been a hot commodity for owners and investors for years now, and with much of the consolidation having occurred it’s often said to be a difficult market for buyers. There are too few communities to choose from, prices are high, and you’re competing against a lot of other potential buyers.
For Suzanne Taylor and her team at Augusta Communities, a 501(c) 3 affordable housing organization, the challenge is all the more real.
“Augusta is competing with for-profit investors who have larger organizations, plenty of access to capital and offer a very quick close. For-profits can take on more investment risk. The motives of most for-profit owners are different than ours. Our central goal is to maintain housing affordability for our residents and to improve their community,” Taylor said. “In the nonprofit model there’s no distribution of cash flow, it goes back into our efforts to build the community and fund future acquisitions.”
The nonprofit model was born out of thoughtful negotiations with Southern California municipalities more than 20 years ago at a time when residents were reaching out to their city officials for assistance in maintaining housing affordability. Since that time, Augusta has acquired six communities of its own and manages parks for local municipalities.
“Augusta’s nonprofit model was developed as a way to work with municipalities to fund these acquisitions because they can issue tax-exempt bonds with favorable interest rates and 100% financing or more,” Taylor said. “That allowed us to be more mission-driven in general, putting the residents’ needs first in all of our communities.
Augusta’s financing options have expanded beyond bond financing. In early summer it closed on a $15 million Duty-to-Serve Fannie Mae loan.
The nonprofit model allows Taylor and her all-women-led management team — Accounting and Finance Director Chrissy Summerville, Business Development Director Erica Taylor, and Director of Community Services Vanessa Hatch — to make common area improvements, upgrade utilities, renovate or replace homes, and offer a robust resident services program.
Resident programs within the communities include…
Financial assistance
Vaccination clinics
Summer camps
College scholarships
Free tax prep
Homework clubs
English language programs
Health fairs
Good neighbor awards, and more
Erica Taylor, Suzanne’s daughter, calls the effort a “full-time community improvement project”.
“It is important to have a relationship with residents and continue to work to preserve manufactured home parks as affordable housing,” Erica Taylor said. “We always are working hard to make our communities a better place to call home. Our residents really like living here and we want to give as much back as we can. We meet and confer with our residents and reinvest project revenues back into our communities.”
Augusta’s model differs from the resident-owned community model. In a resident-owned community, the park is operated by a constituency of residents who serve on a governing board that oversees the operation from a legal and financial perspective, and can advise on mission-driven operations. Augusta is overseen by a volunteer board and managed by third-party professional management groups that specialize in manufactured housing.
“It’s so technical, how you manage your property, with rents, human resources, how you participate in government-sponsored improvement projects. It’s hard,” Suzanne Taylor said. “Our residents are pleased that they don’t have to manage each others’ space. They rely on our team and our board.”
Augusta must comply with government-imposed financial and affordability regulations that guaranty long-term housing affordability. These regulations require Augusta Communities to maintain at a minimum 20% of each of its parks for low-income housing, but overlaying agreements bump that requirement much higher to nearly 90@ in some projects.
‘Gateway to the Sequoias’
A somewhat recent acquisition for Augusta Communities has been rebranded from Mooney Grove to Rancho Robles, a community in Visalia, about 45 miles south of Fresno.
“It’s a beautiful place with all of the services that make a great city,” Erica Taylor said. “Everyone in the community is really happy, and proud of what we’ve been able to do there, and we are too.
“We have renovated the clubhouse, moved the office from clubhouse to a new model home, gated the entrances and added solar street lighting, installed new signage with its new name and branding, renovated older homes, installed new home, applied for the gas conversion program, and have begun offering resident service programs,” Erica Taylor said.
The replacement of homes has been aided by partnerships with other nonprofits, a blessing for an organization that lacks access to capital many for-profit organizations are finding from Wall Street and elsewhere.
She said even with all of the recent changes at Rancho Robles, there are 30 cleared and ready sites awaiting new homes. Those new homes will be paid for by capital made available by the refinancing of other communities, which is one way the nonprofit housing organization expands its efforts.
“We help individuals solve problems,” Suzanne Taylor said. “We work very hard to have strong relationships with our residents as well as our investors and our regulatory and funding partners.
All of Augusta’s communities are in California, but the organization may move beyond the state in the coming months and years.
“We don’t have any real geographic limitations from here,” Erica Taylor said. “Ideally, we’re looking to go from Texas west.”
Competitive bid sale provide priority bidding to non-profit organizations, units of state and local government
The U.S. Department of Housing and Urban Development’s Office of Asset Sales will conduct a competitive bid HUD-held vacant note sale (HVLS 2022-1) on Nov. 10, 2021.
The sale will include approximately 1,730 reverse mortgage notes secured by properties where the borrower is deceased and not survived by a non-borrowing spouse. Consistent with the Biden-Harris Administration’s Sept. 1 announcement that more HUD-owned properties should be returned to future owner-occupancy, HUD will offer up to 50% of the notes in the multi-loan pools for bids first by eligible non-profit organizations and units of state and local government. Previous sales prioritized approximately 10% of the mortgage notes for this purpose.
“This sale provides greater opportunities for non-profits and local governments to purchase properties that can then be made available for affordable homeownership and support neighborhood revitalization,” said Principal Deputy Assistant Secretary for Housing Lopa P. Kolluri.
The sale seeks to increase affordable housing supply, expand opportunities for homeownership and rental housing, and revitalize communities through the disposition of these notes, including:
Selling properties to low- to moderate-income homebuyers at a price affordable to households earning less than 120% of the Area Median Family Income; and
Leasing properties at rents affordable to households earning less than or equal to 80% of the Area Median Family Income.
To encourage more non-profit organizations and local governments to participate in this and future sales, HUD is hosting a virtual training conference for such organizations on Sept. 29. The conference, “Expanded Opportunities for Participation,” will include presentations on the note sale process, technical considerations, and an overview of the mortgage notes and processes for the November sale.
HUD’s Office of Asset Sales is part of the Office of Finance and Budget in HUD’s Office of Housing. All mortgage notes to be sold through the Nov. 10 sale are for vacant and abandoned properties secured by Home Equity Conversion Mortgages assigned to HUD following the death of the borrower and any non-borrowing spouse where the time for heirs to come forward has elapsed.
The SECO National Conference of Community Owners has announced its programming schedule and lineup of speakers for SECO21, bringing the nation’s top manufactured housing experts together for a week of live online programming with over 50 sessions planned.
Now in its 11th year, SECO is a landmark conference “for community owners, by community owners,” providing opportunities to learn, interact, network and shop the latest manufactured housing offerings. The national event represents all parts of the manufactured housing industry, with an emphasis on small to midsize community owners.
“SECO has always prided itself on bringing the best of the best in manufactured housing community ownership to share what’s been working in their communities, and how others can implement those strategies,” SECO co-founder and organizer Spencer Roane said. “The event will feature over 60 educational sessions, over 100 speakers, over 35 sponsors and exhibitors, and hundreds of small to midsize community owners from across the country.”
SECO21 Schedule Offers Five Days of Unrivaled Community Owner Programming
SECO21 will offer five days of interactive programming for community owners and managers, including its Manager Monday workshop sessions geared exclusively for managers.
At SECO21, attendees can attend sessions such as:
Marketing Your Community on a Shoestring – The Most Effective Ways to Market Your Property with Limited or No Budget!
The Angry Resident – Working with Difficult People
Manufacturer Insights Panel
Managing Social Media
Considerations When Buying Distressed Parks
Acquisition Financing: What You Need to Know and Gather Up Before You Contact a Lender
Ask the Attorneys
Panel Discussion: Newcomers “Lessons Learned”
Due Diligence Land Mines
Best Practices for Website Optimization
The Rental Home Model
One-Minute Moneymakers
F.I.R.E.: Financial Independence, Retire Early! Swapping Salary for Spaces
Is an RV Park in Your Future?
Biden Tax Ramifications
Lease-Option MH “Financing”
And much, much more!
“Our returning attendees come back each and every year because of what they learn at SECO’s wide variety of events,” David Roden, another SECO planning committee member, said. “SECO21 has perhaps the most diverse event lineup in the conference’s history, and we can’t wait for everyone to come to this year’s event and learn from the best in the industry.”
In its second year as an online event, SECO’s new virtual event platform ensures that the event can host more sessions than ever, along with accommodating a record number of attendees.
“Shifting to virtual has only helped SECO in the long run,” SECO planning committee member Tom Lackey said. “We reached more attendees than ever at SECO20, our first virtual event, and we’re hopeful to keep that momentum going this year.”
Manufactured Housing All-Stars to Take the Mic at SECO21
SECO is proud to welcome the industry’s leading voices to share their insights and successes as community owners and managers, including:
George Allen, CPM Emeritus, MHM-Master, EducateMHC.com
Ed Barber, Principal, Iron Horse Interest Team
Mark Bowersox, President, Manufactured Housing Institute
Ken Corbin, President, CallKenCorbin.com
Kurt Kelley, President, Mobile Insurance
Darren Krolewski. Co-President, Chief Business Development Officer, MHVillage/Datacomp
Ryan Narus, Principal, Archimedes Group
Chris Nicely, President, ManufacturedHomes.com
Frank Rolfe, Co-Owner, Mobile Home University
Ekaterina Stepanova, Principal, M2K Partners
Don Westphal, Owner, Donald C. Westphal Associates
The full list of speakers and schedule of SECO21 sessions can be viewed here.
“SECO grew so much over the years that in 2020, our first year going virtual, we actually sold out of tickets,” Roane said. “That’s why we push for everybody to register as soon as they can, so they don’t miss out on all of the networking opportunities that SECO provides.”
SECO21 tickets are sold in four different tiers: Manager Monday tickets, which offers access to all Manager Monday workshop sessions, General Admission tickets for Tuesday – Friday sessions, VIP tickets which offer Tuesday – Friday session access and recordings of the main event, and All-Access tickets which grant full access to Manager Monday sessions, main event sessions, and full event recordings.
This year’s conference is once again a partnership with MHVillage, the leading marketplace for manufactured and mobile homes for sale.
For more information on SECO21 or to register online, visit secoconference.com. SECO21 is an industry conference for manufactured housing professionals and is not open to the general public.
About SECO National Conference of Community Owners
The SECO National Conference of Community Owners was founded 11 years ago by a small group of committed manufactured housing professionals and has been held each year near Atlanta. The gathering is dedicated to building an industry environment and culture that looks to share best practices and help form new ideas. SECO, a tax-exempt 501(c)(3) organization, was created for community owners, by community owners. All proceeds go toward planning and programming for the next year’s national gathering. Any excess revenue supports the Veterans Assistance Fund founded by SECO organizers in 2018 in support of veterans and first responders across the U.S.
The Texas Manufactured Housing Association met this week in Frisco, Texas, near Dallas, with a full day of programming for manufactured housing professionals on Monday. The luncheon speaker, Dr. John. S. Baen, a real estate professor at North Texas University, provided a spirited pep talk on the quality and value of manufactured housing.
“I believe in what you’re doing. This is the future. You’re looking at it,” he said.
Baen said city officials have very limited knowledge about manufactured housing and that it’s the industry’s job to educate them.
The professor also acknowledged the presence and pain of material costs and supply shortages, as well as the labor pains many industries are feeling.
“I don’t know when it’s going to get better, but it has to… we need to build better product and better advertising to promote our homes.”
Baen used a series of informational and often comical slides to impress upon the TMHA attendees that Texas stands to gain mightily if it can provide enough housing for all of the people drawn to the state.
“Let’s keep this in perspective,” he said. “A lot of people are escaping here.
“Millions of people have come across the Rio Grande. They could have chosen New Mexico, Arizona, California… but they know where Texas is,” he said.
He said while the birth and death rates balance each other out, the only way to increase population is through immigration and migration. Californians, in particular, are moving to Texas, and it’s not just individuals and families. Texas is drawing big business that will provide jobs, jobs for workers who will need housing.
“More people is more housing for you and me… Remember, you own the competition on price. Our houses are a 17th the cost of theirs,” Baen said of manufactured homes.
Dave Hegemann is the founder and president of London Computer Systems, or LCS, the provider of Rent Manager software. Photos courtesy of LCS.
An Ohio Boy in the ’80s Harnesses Latest Technologies for Family Properties
Dave Hegemann, like most kids his age, was simply looking for more time to spend with his friends outdoors during the summer.
“My dad had manufactured housing parks and campgrounds, and other properties that he rented,” Hegemann, founder of Rent Manager and President and CEO of London Computer Systems, recalls. “He used to do the books by hand, and I used to help him once I got old enough. It was my weekend thing. I couldn’t go out and play basketball or anything else until I was done.”
Someone had to collect readings, record usage, and calculate the proper charge. Utility billing was on a ledger, and required checks and re-checks. The rapid-fire keystrokes of the adding machine held off even calculators in office spaces and storefronts everywhere.
But by the mid- to late-80s, Hegemann had access to an Apple II, and had his eye on what a little company in Washington was doing with its software.
Hegemann hard-coded the first version of Rent Manager specifically for his father’s operation, but later received requests to rewrite the program for a larger property owner from London, Ohio. That initial bit of work inspired the name of Rent Manager’s parent company, London Computer Systems (LCS).
“I wrote the program for him, and about five other manufactured housing communities. I got into it, and it was a lot of fun. I basically wrote it in a summer,” Hegemann said. “That worked so well we thought we should bring it down to the Louisville home show.”
An Entry to the Industry in Louisville
Hegemann set up his computer at the Louisville Show in 1988. No one knew what property management software was. But they’d heard of the new desktop computers.
“Basically you were competing against doing the books by hand. There were no other solutions,” Hegemann said. “A lot of times people would come to the booth just to see the computer. Customers may have heard of a personal computer at that point, but hadn’t actually seen one.”
Hegemann said he felt the show would be a success for him if he could sell a single program. If he could find one customer, he’d keep course.
“I sold one program to the first guy I talked with… he spent about four hours with me, went away and kept coming back asking questions,” Hegemann said. “Eventually I just said, ‘Look you’re going to have to buy this thing’.”
Then there was the next hurdle: “I couldn’t process a credit card,” Hegemann said.
The headquarters of London Computer Systems and Rent Manager in Cincinnati, Ohio.
How Rent Manager Became a Business
Eventually, the card was run and the sale was made, but the divide between tech work and building a business was evident.
“I’d known how to write code, but I didn’t know how to sell it,” Hegemann said. “Because there was no internet, I just jumped on a plane and went to shows all over the place, talking to people directly. If someone bought the program and if something didn’t suit them, I’d hear about it at the next show, and I was able to make the product a lot better that way. It was a lot of fun.”
Much of the momentum with the product and the business happened prior to the advent of the web. The world was just figuring out software, how you should price it, and how it’s maintained.
Before most of the world knew Bill Gates, Hegemann was paying attention.
“I saw what Microsoft was doing, how they were writing software and how they would sell it over and over again, and that may seem obvious now, but it was novel in its time and that’s what I wanted to do.”
“With Dave’s leadership and imagination, Rent Manager has consistently added feature after feature and ehanced overall user experience… Dave and his team have embraced an open architecture of the product, which allows partner companies to use Rent Manager’s API to intergrate their applications.”
– Mike Cirillo, President of Star Management
One of the distinguishing factors about Rent Manager’s offering that may be rare in the marketplace is that the offering is built on a single code base, similar in nature to the way Microsoft was rolled out. The program starts out basic, and then you can turn on components as you go and become more sophisticated.
“We do this also because our product is used by all different property types, and you need to be able to service all of those needs,” Hegemann said. “When we’re working with a customer, we build up from the base offering with added features that address specific needs within an operation.”
Hegemann’s degree is in systems analysis, and he understood early on that he was “all in” with the software industry. The chance that his application of technology supports real estate was a matter of his surroundings, but it also became a preferred destination when the wide array of needs in the space became clear.
LCS Chief Operating Officer Brittany Christerson has been at Hegemann’s side for 12 years and has seen firsthand how his early industry experience impacts his leadership outlook.
“Because he grew up in the property management business, Dave is quick to remind us there is an urgency to our work,” she said. “He challenges us to look for ways to make the lives of property managers easier, and that in part comes from his early years working with his dad. We are constantly working to improve the quality and execution of our offerings because we know they have a real impact on our users.”
After building the program, Hegemann said he realized something important about his role.
“There was only so much that I could do by myself… it was about motivating people,” Hegemann said. “The most exciting thing to me became building a company and it took a long, long time to interview, ask good questions, recruit people and keep people.”
“You have to give people a feeling of ownership, with some latitude to have success on their own,” he said. “I learned that if your team is happy, they’re going to make your customers happy.”
Today, LCS products include the Rent Manager property management software, rmVoIP telephone systems and enterprise-level hosting solutions via the company’s Sentry Data Center. The Cincinnati-based company also provides complete network design, implementation, and support services. They even offer custom website development through its IT Services and Web Design Services divisions.
“Dave makes it a point to meet every new hire and regularly visits with all our teams because he wants employees to know that he truly cares about their experience,” Christerson said. “He has created a culture where we work hard, and we are proud of our work, but we also have a lot of fun.”
Rent Manager Integrated Technology Partners
One of the many ways Rent Manager has continued to grow with advancements in technology is through the creation of its Integrations Program. Users have freedom to seamlessly integrate any number of property management providers into their Rent Manager database. More than 100 technologies—ranging from utility management resources to digital payment processors — have joined the Integrations Program.
Manufactured housing providers include AmRent, AvidXchange, Metron, NetVendor, Purchasing Platform, and Zego. Visit RentManager.com/Integrations for a complete list of included technologies and services.
How to Work with Emerging Technologies
One of the primary tasks that engrosses his employees is early adoption and experimentation with new platforms and programs. Rent Manager, Hegemann said, has always been one of the first—if not the first—property management solutions made available in the “next” technology format, whether it’s Apple, DOS, Windows, the internet or mobile apps.
“That’s one of the things that I love so much—technology changes a lot and you really have to work to keep up with emerging platforms and to make your product all it can be in any of these environments,” Hegemann said. “Rent Manager has always been backward-compatible, from day one.”
Rent Manager’s customers are brought up to speed on all the changes, advancements and added options each year at the company’s user conference, which alternates cities every fall. This year’s Rent Manager Users Conference takes place Nov. 9-12 in Colorado Springs, Colo.
The event has become a product of its own for Rent Manager.
“Oftentimes, the conference is the first place we meet with our customers face-to-face. It’s when you learn how enthused and appreciative people are,” Hegemann said. “It’s a great morale thing for us, it creates a lot of energy, and we essentially plan the event year-round.”
There will be 71 user sessions at RMUC.21, presented by Rent Manager staff and industry authorities. Hegemann said he attends at least a portion of each session.
“I want to know that we’re on track and providing value for our customers,” he said.
Manufactured housing professionals industry-wide and nationwide continue to register for SECO, a professional trade show held virtually Sept. 27-Oct. 1, as organizers continue to shore up the annual gathering’s educational and networking schedule.
The SECO National Conference of Community Owners is in its 11th year, having met the first nine years each fall in the Atlanta area. SECO has grown from a small group of community owners, to one of the largest and most vital manufactured housing conferences on the industry circuit.
“SECO is hands down the best event in the MHC industry as it caters to people who have no experience in the industry all the way to people who have been in the industry for 30+ years,” SECO attendee Lewis Whitely, of Iron Horse Interests, said. “Everyone is there to there to connect and lend their particular expertise in a way that no other industry event offers.”
After SECO20 attracted nearly 500 attendees, SECO21 expects around 700 attendees to take part this year, which will be its second as a virtual event. Beyond attendance, SECO21 has several exhibitor and sponsorship opportunities still available for industry professionals and organizations.
This year’s conference is once again a partnership with MHVillage, the leading marketplace for manufactured and mobile homes.
SECO21 Speaker Topics, Schedule Come Together
The organizers for SECO21 have been building the education and networking aspects of the annual event. Additional topics, with information on presenters and panelists, will be announced in the days to come. Below is a sneak peek at some of the discussion items already finalized for the virtual event.
Why Buying at VERY Low Cap Rates May be Smart
Chattel Financing Terms
Ask the Attorneys
Lessons Learned by Newbies
MHC Broker Feedback
SECO21 also offers a series of mini TED-talks on topics as diverse as resident-owned communities, 3D-printed homes, and the RV/MH Hall of Fame. The event also will host fireside chats, roundtables, networking with exhibitors and sponsors, and a virtual cocktail hour.
The kickoff day for SECO21 is Sept. 27, Manager’s Monday, with a full lineup of community management-specific topics and discussions. Manager’s Monday topics include how to market a community on a shoestring budget, how to work with angry residents and difficult people, and a review of paperless solutions that reduce waste and expenses. Participation in Manager’s Monday costs $149 and requires a separate registration.
About SECO National Conference of Community Owners
The SECO National Conference of Community Owners was founded 11 years ago by a small group of committed manufactured housing professionals and has been held each year near Atlanta. The gathering is dedicated to building an industry environment and culture that looks to share best practices and help form new ideas. SECO, a tax-exempt 501(c)(3) organization, was created for community owners, by community owners. All proceeds go toward planning and programming for the next year’s national gathering. Any excess revenue supports the Veterans Assistance Fund founded by SECO organizers in 2018 in support of veterans and first responders across the U.S
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